Burying the Hachette

DISCLAIMER: The views presented in today’s post do not necessarily reflect those of Writer Unboxed or its other contributors. They are solely the opinions of the author of this post, and should not be read while drinking, operating heavy machinery, or reading the works of Clive Cussler (although it might be fun to try doing all those things at the same time).

I’m going to risk pissing some people off today, but I’ve been watching the ongoing Amazon/Hachette drama recently, and I feel the need to share some observations that will likely stray from the viewpoints of many traditionally published authors. Some context: I’m a published author (both traditionally and self-published), and I also have a master’s degree in business, so I’m inclined to look at this situation from more than one angle. And what I’m finding doesn’t align well with the oversimplified bumper-sticker conclusions I see many people drawing; in particular, the “Amazon is evil” mantra that is being adopted by many conventionally published authors.

Some facts and thoughts about who sells what

Many authors seem to feel that Amazon has an obligation to sell Hachette’s books. In a blog post that James Patterson oh-so-dramatically entitled “Read four of the most important paragraphs I’ll ever write,” the author has gone so far as to suggest that Amazon’s current tactic of “making it difficult [emphasis mine] to order many books from Little, Brown and Grand Central,” is something so morally heinous and evil that the practice “has to be changed – by law, if necessary – immediately, if not sooner.”

In citing Amazon as being flat-out criminal in its decision to make ordering certain books “difficult” (because let’s face it, we all know how darn difficult it is to find and purchase a James Patterson book), Patterson is apparently ignoring the fact that:

No store sells everything.
In brick-and-mortar stores, this is a function of limited shelf space. Retailers need to pick and choose what they sell, based on what they can afford, what they have room to stock and display, and what markets they’re trying to serve. As consumers, we accept this, and we develop our own sense of where to purchase the various goods we desire, without condemning any stores as being “evil” for not carrying a specific product we seek. And certainly without asking the Department of Justice to step in.

Lacking the physical constraints of a brick-and-mortar store, Amazon admittedly comes closer than most to being a “store that sells everything,” as demonstrated by exotic and unusual product offerings like the utterly essential Hutzler 571 Banana Slicer, or this perfect-for-any-occasion Horse Head Mask (bonus: read the reviews for a good laugh). But even Amazon is subject to the reality that:

No store CAN sell everything.
Even if they wanted to, not every retailer has access to every product line. For example, Trek is one of the most popular bicycle brands in the world. But you can’t buy their bikes at Target. Nor on Amazon. Nor at Walmart. That’s because Trek has chosen to only sell their products at bicycle shops, a move that both limits their products’ availability, and increases the likelihood of expert sales and service. This choice seems to work, given the brand’s popularity, and I’ve yet to hear of the company being compared to the devil. This leads us to the even more important fact that:

No store is obligated to sell anything.
This is the Big Point that Amazon’s detractors keep ignoring. Neither Amazon nor any other retailer is obligated to sell a specific product line. Just because I create a cool line of T-shirts doesn’t mean I can talk Target into selling them. On the contrary, vendors have to compete for shelf space at successful retailers. And that competition can become truly brutal with powerful retailers like Walmart.

Retailers playing hardball with their suppliers is nothing new. And if you regularly shop at Walmart, you really don’t have a leg to stand on in condemning Amazon’s practices.

When I was in business school, we had many guest lecturers, but in particular I remember a former Van Heusen executive who told us some horrifying tales of the pressures Walmart had put on his company, and the disastrous consequences that ensued – for Van Heusen, not for Walmart. For an example of Walmart’s power over its suppliers, watch this portion of the PBS Frontline documentary “Is Wal-Mart Good for America?” Aired in 2004 (back when the company was still hyphenating its name), this episode shows the key role Walmart played in the rise and fall of Rubbermaid, in a chilling glimpse at the power a big retailer can have over its suppliers. The whole series is excellent, and offers a sobering look at the high cost of serving and cultivating a marketplace that focuses primarily on price.

My point? Retailers playing hardball with their suppliers is nothing new. And if you regularly shop at Walmart, you really don’t have a leg to stand on in condemning Amazon’s practices, which pale in comparison to some of the draconian measures employed by the Arkansas-based big-box behemoth. (Oh, and for an added dose of irony, most authors – myself included – would KILL to have their books sold at Walmart, since getting placement on their shelves is such a huge strategic sales advantage.)

But these are books, and Amazon is a bookstore, dammit!

Um, no – it really isn’t.

This is something that many people forget, or simply haven’t realized: Amazon is not a bookstore. It’s not Barnes & Noble on steroids. It’s much more like Costco, or Target, or Walmart: a powerful retailer meeting a wide span of consumer needs at discounted prices. According to articles in The New Yorker and Forbes, Amazon’s US book sales make up only 7% of the company’s $75 billion in total yearly revenue. In other words, books are just part of the massive product line Amazon stocks, so one publishing house’s books aren’t going to make or break it. The reality is that Amazon could stop selling Hachette books entirely, with minimal impact to their overall revenue.

Amazon is not a bookstore. It’s not Barnes & Noble on steroids. It’s much more like Costco, or Target, or Walmart.

Sobering as that reality may be, this actually represents a sound business practice. If your success depends entirely on one line of products, or one brand, then you’ve fallen into the whole “all your eggs in one basket” scenario, which you don’t need an MBA to know is a bad idea. A diversified portfolio – whether we’re talking products, services, stocks and bonds, or whatever – is always a prudent bet.

Of Satan and shoes

Amazon detractors are also wringing their hands over the fact that on the product pages of some Hachette books, Amazon is blatantly pointing people to other competing titles. OMG – that is a whole new form of diabolical treachery, taking their uber-satanic evilness to a whole new level!

Only it isn’t.

If you’re in a shoe store, and the shoe you like isn’t available in your size, what does any decent salesperson do? They point out some similar shoes that they hope might interest you. It’s hardly a new practice, nor is it necessarily evil. At the worst it might be mildly annoying. And at its best, you might end up with a rockin’ new pair of shoes.

A balanced viewpoint from a Hachette author

It’s easy to be armchair quarterbacks as we watch this contest unfold, so I wanted to also share some perspectives from someone who’s actually on the playing field.

The always provocative author/self-publishing pioneer/pundit JA Konrath has established himself as a harsh critic of conventional publishing. His arguments are often both polarizing and unyielding (to put it mildly), so I was intrigued when he recently stepped aside and featured a guest post from a conventionally published author, who offered one of the most balanced perspectives I’ve seen on the Amazon-Hachette impasse. Konrath’s guest poster, Michael J. Sullivan, is a fulltime novelist who definitely has real skin in the game, with multiple books published by Orbit (Hachette’s fantasy imprint). I think Sullivan sums things up brilliantly here:

In today’s landscape, publishers are in a tight spot, but they have only themselves to blame. For years their “customer” was the retail channel. They didn’t foster a direct relationship with readers and as such ceded that ground to Amazon. Back when Amazon was gaining dominance, why didn’t they build a site to sell directly to readers? Oh, I forgot…they did. It’s called Bookish and it’s been a miserable failure plagued by delays, poor management, a terrible online experience, and rather than discounting books they sell at full price. Is Amazon “evil” for building a really good mousetrap? Similarly, there was a huge outcry when Amazon bought Goodreads. But why didn’t any of the publishers pick it up first? A site with millions of readers talking about and sharing books, and no one but Amazon saw the value in such an asset? It’s unfair for the publishers to criticize Amazon for their own lack of vision.

So yes, there is an imbalance of power, and Amazon is in a position of strength. It’s because Amazon has been smart, forward thinking and innovative while publishers have plodded along with a “business as usual” mentality, leaving them behind the times. Does Amazon have to give publishers special treatment for their poor choices?

I hope Sullivan’s remarks don’t get him in trouble with Hachette, but I have to say, I find his candor and analysis far more compelling than the chest-thumping of authors like Patterson, who has no problem complaining about Amazon all the way to the bank. Hmmm – here’s a thought: Since he seemingly fears for the future of the entire American culture, maybe Patterson could donate the Amazon-generated portion of his earnings to some noble cause, like the Save Our Adverbs Partnership (SOAP), or my recently hatched nonprofit organization: “Friends Don’t Let Friends Read Cussler.” (Sadly, attempts to secure donations from Patterson have gone unanswered to date.)

Biting Gently nibbling the hand that feeds you

Colbert’s new campaign

In one of the latest chapters in this soap opera/war story, TV personality (and Hachette author) Stephen Colbert jumped on the anti-Amazon bandwagon, slamming the company publicly – and hilariously – in what I interpret as one of the first smart moves Big Publishing has made in terms of a PR counteroffensive.

We all know (I hope) that Colbert is an entertainer pretending to be a pundit, and that his primary goal is to make us laugh. But I can’t help noticing that Colbert’s books are still on sale at Amazon. Oh, and so are Patterson’s. As well as books by everybody else who’s complaining so vocally. This article in The Guardian calls these authors out for this apparent hypocrisy:

But look: if Amazon is indeed doing so much to destroy literature and all the rest, if the situation really is so dire that the US government has to pass laws to fix it, why haven’t Patterson, Robinson, Russo, Turow and other anti-Amazon authors demanded that their publishers pull their books from Amazon? How can someone condemn a company’s evil, monopolistic, culture- and livelihood-destroying ways … while continuing to make millions of dollars working with that company?

Good question. So far, none of the authors named above have responded.

Hitting close to home

I think the reason this issue is such a hot-button for us is that as writers we are all picturing the horrible notion of OUR books being the ones that are affected. From that viewpoint, it’s easy to blame Amazon, to consider them the bully. After all, they’re the ones hindering these books from being sold, right?

Wrong.

There are TWO sides to this. It’s not a blockade; it’s a tug of war. And the books are just the rope.

Yes, Amazon is flexing its considerable muscle. But keep in mind that for now, Hachette has decided to allow their authors’ books to become the casualties of this tug-of-war. And – this is key – the authors have absolutely no say in that decision.

It’s not a blockade; it’s a tug of war. And the books are just the rope.

Sorry, but I can’t place all the blame on only one end of that rope. I feel genuinely bad for the Hachette authors whose sales may be impacted, but I cannot jump on the anti-Amazon bandwagon. Frankly, I’ve never been much of a bandwagon-jumper, and I doubt that will change, because issues like these are so rarely black-and-white.

What do YOU think?

As I stated in my opening disclaimer, these are just my thoughts, based on what I know and what I’ve seen so far. But far greater minds than mine are focused on this issue, so I’d love to hear your input (even if it’s just to call me a big poopyhead). Please chime in, and as always, thanks for reading!

Author of the novels ME AGAIN, published by Five Star/Gale; and TONY PARTLY CLOUDY (published under his pen name Nick Rollins), Keith Cronin is a corporate speechwriter and professional rock drummer who has performed and recorded with artists including Bruce Springsteen, Clarence Clemons, and Pat Travers. Keith's fiction has appeared in Carve Magazine, Amarillo Bay, The Scruffy Dog Review, Zinos, and a University of Phoenix management course. A native of South Florida, Keith spends his free time serenading local ducks and squirrels with his ukulele.

Comments

Really thoughtful post, Keith. I think you touched on all the right issues. No store is obligated to carry any product, and Amazon is still carrying Hachette books. If authors are selling fewer books because Amazon refuses to discount them, they should be mad at Hachette for pricing them so high. It is amazing that Amazon is getting so much blame from authors, rather than authors saying to Hachette, “what exactly are YOU doing in negotiations” to secure authors’ best interests?

Traditionally published authors have agents for a reason — because they know publishers might screw the over if there were no one to help look out for their interests. Yet the assumption here seems to be that the publisher is looking out for authors while Amazon isn’t. Oddly enough, the statement Hachette released on negotiations seems to indicate the company is looking out for itself, not necessarily authors. The statement said Amazon didn’t value authors or publuishers. The truth is I think Hachette is right about one of those. I don’t think Amazon values the middleman (publishers) at all and would prefer to keep more of the publisher’s share. When dealing directly with authors Amazon offers better rates than traditional publishers do.

Yes Amazon is playing hardball, but we expect no less from big box stores. If the authors hate it so much, they can, as so many others have suggested, pull their books. The real problem is Hachette wants authors on their side but won’t tell what they’re fighting for because negotiations are private.RJ Crayton´s last blog post ..There is no stigma to success; self publish if you wish

Seriously, my daytime life consists of business, marketing, and engineering (I hear I have a degree in that, but have yet to drive a train). I am a free-market guy all the way. The people bashing the Big A seem to forget that it was Amazon that returned us to books costing less than our monthly cable bills.

I’ll just say “Yes yes yes” to everything you’ve written and move on to my business-marketing-engineering point:

We are suppliers. Having been an automotive supplier and dealt with suppliers to my companies, I understand that the supplier must cut his best deal. We must also be diplomatic. Taking sides in this issue will not profit the writer. The writer must continue to write, then seek his or her best opportunity for a healthy profit (there’s that P word again).

Like most writers, we’re discovering a new magical land of choice. We can publish through trad publishers, go with a small press, self-publish, or post our entire novel on facebook. Or do all of the above. Never before has the supplier had so many options. If the publishers and retailers want to battle over contracts, our only concern is to sift through the carnage and determine how to take best financial advantage of the outcome.

As for those screaming for government intervention, you must be new here. Government intervention produces such wonders as Amtrak, the US Post Office, and the US auto industry (when’s the last time you saw a new car company sprout up?). The free market is bloody and ugly, but it usually provides is with $1.99 e-books in the end.Ron Estrada´s last blog post ..My YA Journey – week 2

I think it was Schumpeter who described free-market capitalism as “creative destruction.” Things get destroyed: businesses, jobs, livelihoods. But if the market is vibrant, out of the ashes something better emerges. That’s the theory. Like sausage-making and legislation, it ain’t pretty.

I share Donald’s concern that these may not be creative ashes, but I too think asking the government to step in is like being the bully who finally gets his ass kicked and then screaming for the teacher to do something.

Oddly, there don’t seem to be ad hominem attacks against Hachette coming from Amazon authors, nor calls for government intervention.

I’m with you, Mr. Big Poopyhead – the truth is going to be somewhere in the middle, but only one of the contenders is not sticking its tongue out and going nyah nyah nyah at the other.

It will be very interesting to see who ends up with which and how many marbles – I don’t think Hachette wants to lose Amazon as an outlet for its books, just to get the most favorable terms it can as a corporate giant. And first of the Big 5 to renegotiate its contract.

An excellent post and a refreshing sight to see! Much of what you said is what I’ve said myself, though you said it so much more eloquently.

Another point I first noticed on one of the few pieces defending Amazon is to note who owns the major media outlets which feed public perception. Hint: none of those owners are Amazon but they might all be friends of a Big Five. I find it particularly telling that this huge bruhaha is being made over the Amazon/Hachette negotiations, but I’ve only seen a single news source (and a niche one at that) talk about the same thing going on with Amazon and Warner Bros. distribution. The main difference? Warner Bros isn’t vilifying Amazon, they are just doing the usual business of negotiating the contract renewal and Warner Bros is correctly understanding that a business should NOT take preorders on products they can’t guarantee they will have. It only makes sense to halt preorders while you’re seeing if you will still even carry a company’s products.

As for those calling for government to intervene…I can do nothing but shake my head…

Good, balanced points all, Keith! How many times have writers heard agents, editors, and publishers say that publishing is a business, so authors should not take rejection and other painful business based decisions personally? Funny how our words can come back to bite us.

Love the image of the hatchet, Keith. So, with all this posturing going on between these two, the basic issue is really about higher profit margins, isn’t it? In what I’ve read out there on this, my understanding is that traditional publishers get 75% of ebooks, 60% of paperback, 40% of hardcovers. If this is accurate, one of my questions is how is it that a publisher should get 75% of an ebook that has no printing, binding, warehousing, or shipping costs? Do we think any of this will spark more physical book sales in bookstores?Paula Cappa´s last blog post ..Night Sea Journey Earns 5-Star Reviews on Amazon

Thanks, Keith, for the well thought-out post. I don’t feel competent enough to express any opinion, but I am an avid Amazon shopper, and I buy all my books there, whether print or digital. I love bookstores, but I have to be honest about my buying.

Hallelujah, Keith! I am an Amazon author. People can say what they like about it, but Amazon has both willingly and happily given me a platform, and my books have done pretty well there. I’ve noticed that readers don’t really care where their books are published as long as they are good books.

That said, this current issue is a corporate one, and though it is very hard on (and not fair to) the authors it affects (and I’m sorry about that) people should look at both sides — the publishers AND Amazon, before they quickly lay blame on one or the other.

You nailed it, Keith. I’m not anti-publisher, but Amazon has opened the gates for all kinds of writers: good, bad and in-between, and it offers far more generous royalty rates. Others have made this suggestion and I will repeat it. There’s nothing stopping Hatchette, or any other publisher, from creating a killer e-commerce website with all the bells and whistles of Amazon. The fact is that publishers need Amazon and its massive number of customers. If they don’t like Amazon, they don’t have to play ball with them.CG Blake´s last blog post ..Book Review: The Cuckoo’s Calling, by Robert Galbraith (JK Rowling)

I’ll say that I completely agree with what you’re saying – we need a balanced, level-headed look at this. I, too, wondered why no one bought Goodreads sooner. It’s like a writer’s/publishers’ dream – all these readers gathered in one spot, talking about their favorite books. How cool is that?

Anyway, for me, an as-yet-unpublished writer, my take away is keep writing, and occasionally look up to see the big debates in the industry. But the bottom line is to just keep writing.

It’s natural for posts here on WU to focus on the needs of writers. And as a big five author (Self-Editing is with HarperCollins’ subsidiary William Morrow), I understand that concern. But one perspective that seems to get missed a lot is that of readers. (Thanks to my wife, Ruth, for this insight.) Amazon is using the power of their market share to drive down book prices, but they are passing those lowered prices on to the consumer.

They also provide seamless customer service. It’s only a ten minute drive to the nearest bookstore from where I live. But as that bookstore is tiny, it’s unlikely to have the book I’m looking for. I’d have to order it, wait a week or so, then drive down and pick it up. Amazon can have it in my mailbox in two days.

So, yeah, the price battle is hard on writers. But it is good for readers.

“Frankly, I’ve never been much of a bandwagon-jumper, and I doubt that will change, because issues like these are so rarely black-and-white.”

I come from a family of highly opinionated people, where debate was a favored form of entertainment. I was never comfortable jumping into the fray, however, as I could empathize with all positions offered. I thought this was a flaw—the girl doesn’t know her own mind!—until I figured out that my shades-of-gray sensibility was one of a novelist-in-the-making.

I like your balanced view here, Keith. Thanks for tapping both your experience and your courage to offer it up.Kathryn Craft´s last blog post ..My Life as a Grand Bitch

You are brave, Keith. I love that about you.
I have a marketing degree, have run a successful marketing company for over 20 years, and specialize in developing product for Canada’s largest book retailer. Like you, I tend to see everything through business glasses. Which usually makes for politically incorrect discussions around the literary water cooler, with me as the pariah.
Kudos to you for speaking your mind in a professional manner. I am taking notes. :)

It’s great to see such a well-balanced article on this subject, rather than the rants I’ve dipped into so far. I particularly like the comment about Hatchette pricing their books too high to start with!Tess Makovesky´s last blog post ..Exiles reviewed

“Frankly, I’ve never been much of a bandwagon-jumper, and I doubt that will change, because issues like these are so rarely black-and-white.”

I come from a family of highly opinionated people, where debate was a favored form of entertainment. I was never comfortable jumping into the fray, however, as I could empathize with most positions offered. I thought this was a flaw—the girl doesn’t know her own mind!—until I figured out that my shades-of-gray sensibility was one of a novelist-in-the-making.

I like your balanced view here, Keith. Thanks for tapping both your experience and your courage to offer it up.Kathryn Craft´s last blog post ..My Life as a Grand Bitch

I believe there are real live laws against this behavior regardless of what anyone thinks/feels/believes. I agree some of the statements about this situation have been hyperbole and I don’t like hyperbole any more than you do. But the law is the law. If the DOJ was so quick to jump on the anti-monopoly idea, then why isn’t it jumping on the monopsony? All I want to see is fairness. Like you, I tend to have balanced views about things. And I want to see that balance when it comes to law as well.

Also: Hachette is just first in line for this round. You will soon see the same behavior with all of the other big five. This isn’t limited to one publisher. It’s just the renegotiation agreed upon by all publishers. Hachette gets to do it first.

Frankly, if this is what renegotiating looks like to this company (and we all knew it would because this is how they do business) then if this was my distributor, I’d just cancel my contract with them. Risky and stupid, yes, now that they sell 40% of the book market, and also pretty impossible now because of this fact. But I’m known to be stubborn and I walk like I talk. Sullivan makes great points about Bookish. Very good points. I wish it had been a real co-effort that worked, because Amazon does have publishers by the balls and there isn’t much we can do about it now.

So many “news” shows and internet sites are all about telling the reader/viewer who to blame. To me, blame is irrelevant on either side here. As a business person, I would never treat any of my suppliers this way and I would always make sure I was not doing anything illegal…even if for some reason my local law enforcement turned a blind eye. I’m honest and straight like that. As a Hachette author (whose books have been affected) I can only say: I do have a say in this. Our CEO has written to us many times. And each time I reply with: “Fight the good fight. I’m behind you all the way.”

Thanks, Keith.
And for reference, my trade paperbacks from Hachette cost $9.99. I don’t know why anyone would think a printed book that costs 10 bucks is too expensive. I have a mass market thesaurus here from 1972. Its cover price was $4.50. In 1972, a gallon of regular gas cost 36 cents. Seems to me if we’re complaining about how much things cost, the book market is really not all that bad compared. :)

Also: in reference to your reply to Donald, I think the word monopoly gets tossed around because Amazon brought in the DOJ and tossed that word around. The word you’re looking for here is a monopsony.http://en.wikipedia.org/wiki/Monopsony

Darn it! WU is really glitchy for comments today. I posted the last one and the last part didn’t come up. It was: I already am satisfied. I’m not really all that fazed by this situation even though it’s affecting my books. I was never in writing to be rich, and you know this because you’ve known me for years. I am hugely satisfied that my books are published with Little, Brown and my editor and I work so well together and the entire team takes care of me. It’s an extremely satisfying thing after 20 years of hard work to get here. I just want to write books. I get to do that. I get to feed my kids doing that. How could I not feel satisfied and lucky every day of the week, right?

One thing I think you’re missing here: Amazon is a unique business in that investors have thus far not demanded that they make any money. This cannot possibly last forever. We authors and readers (certainly including me) have gleefully contributed to building a monopoly which is going to hurt us whenever Amazon’s investors start demanding a profit. Prices will rise and royalties will fall.

They are playing hardball with one of the biggest publishers in the world. What chance will you have when they lower your ebook royalty from 70% to 30% across the board? Or 10% Or 5%?

As a traditional author, as a self-published author, and as a freelance writer and editor of FundsforWriters.com, I get the business aspects of this business. I have to in order to cover all my bases. It pains me to see authors romanticize and over simplify this tug of war between Hachette and Amazon. Amazon focuses on doing it’s job well – as a supplier to customers. And it’s fantastic at it.

It pains me that Big Five publishers will take an author to the cleaners, taking all possible rights (why do you think traditional authors need agents and attorneys?). I’ve conversed with an attorney who used to work for Big Five publisher who I shall not name. He said he’d written up contracts that he knew would result in the author receiving little to nothing in the long run. In other words, this is ALL business. There’s nothing romantic and touching about selling books. As much as we as authors love our babies, they are widgets in the hands of Hachette and Amazon, and that’s okay. That’s how you make sales.

There are more dang options out there to sell our books now than ever before. It angers me that Hachette (and anyone else) actually recognizes Amazon is their best manner of distribution yet wants to tell Amazon how to run its business. What business owner wants that? Let Hachette go back 20 years and sell through bookstores – back in the days when they whipped everyone, bookstore owners and authors alike, into submission.

Sorry, but I hate a mob mentality. Amazon is doing a phenomenal job. Hachette needs to grow up and realize there’s another big boy in the sandbox, and either learn how to play nice or go find another sandbox, because they’re not going to win that fight.

(Thanks for letting me vent, Kevin. I loved your post, and I’ve been pushing the balanced views of this debate for the past week over my social media channels. Today, I just had to speak up.)

“Neither Amazon nor any other retailer is obligated to sell a specific product line.”

That’s true enough–until a retailer achieves a near monopoly. Amazon doesn’t have that, not yet, despite the support of the DOJ. But it does now lead in print sales and dominate e-book sales.

Those happy about cutting out the Big Five and New York gatekeepers should give some thought to their liberator, it’s size, it’s unregulated power and what that could mean for them down the road.

Barnes & Noble cut prices too (remember the Eighties?) while it put its competition out of business. And then…well.

What bothers folks in the print industry, I think, is not so much dominance as pricing. So long as Amazon (for now) is willing to buy books at standard retailer discounts then turn around and sell them at a loss…well, who cares?

But when heavily discounted e-books (thank you DOJ) go on sale at the same time as full-priced print editions, cutting sales, profit margins and author print royalties–remember that print sales still are 75% or so of all unit sales–that’s not great for anyone except Amazon.

Details of Hachette-Amazon negotiations have been kept close to the vests, but count on it: The war is not over who gets to sell books, but timing and pricing. Amazon wants to sell cheap to gain dominance. Creating a more direct path to consumers for authors makes a nice campaign issue to debate but the real goal is power.

Books are different than other products? As a business-minded guy you might argue that they’re not. And you know what–? I would too. Consumers are more price sensitive than the print industry would like to recognize. Lower prices and people buy.

Look at the spikes in the Kindle store when one-day discounts are offered. (And look at the cliff dive when the prices go back up.) Heck, people even snap up books at $2.99 that they wouldn’t bother with at $7.99. What’s wrong with cheap books?

Nothing, really, until one retailer sells everything and decides what we get, when, on what terms and at what price. That’s not just business. That’s monopoly and history has cautionary tales to tell us about that.

Is the current standoff just a tug of war? Perhaps, but ask me the stakes are high for everyone–including those who have little sympathy for the likes of Hachette. James Patterson may have jumped the gun in calling for regulation, if not law, but I get where he’s coming from.

Don, you make some good points. But your publisher SHOULD be selling ebook versions of your book for a fraction of the print copy. I made the mistake of buying one a couple of years back, at the same price as the paper copy. We live in a tiny house and the hubs and I decided to go for ebooks wherever we could to save bookshelf space.

It remains the worst formatted and nearest to unreadable of any ebook I’ve downloaded, including the freebies from near illiterate self-publishers. I’m guessing rather than other spending a few dollars reformatting a version for Kindle, your publisher simply uploaded the pdf of the print copy. Despite having the hugest admiration for your work, since then, I haven’t been willing to purchase another of your books.

If I’d paid 1/3 or even 1/2 of the print price, I’d be far more likely to put up with those formatting issues.

Donald, thanks for sharing your thoughts. You’ve got way more miles in this business under your belt than I do, so I value such expert perspective.

I do find myself cringing over how the term “monopoly” keeps getting thrown around. Is it really a monopoly when one business becomes dominantly powerful largely due to the ineptitude and non-responsiveness of its competitors? I don’t know the answer, but if I believed that all the competing entities had actually been doing their best, I’d feel a lot more sympathy for those currently on the losing side.

I mean, how can you get caught with your pants down when you get a warning more than a decade in advance? The publishing industry (along with the rest of the world) watched the music industry implode and completely transform over the past 15 years, to the extent that now a computer company – not a record store – has become the dominant music retailer. Did Big Publishing learn nothing from that? In many ways, that’s how it looks – at least to me.

I was hoping you’d chime in on this. First, your argument about price-point is exactly right. My backlist is published by Mysterious Press/Open Road Media, a partnership that had a very good business model. But the books just sit there until they’re discounted. I get nothing until a book sells. So I’m THRILLED when they discount the books. Finally, product is moving. (And yes, I know books aren’t widgets. Ahem.)

The fact Amazon can sell below cost, forcing prices (and thus advances and royalties) downward seems like a powerful argument against them. But it neglects the fact that each of the NY publishing houses is themselves part of a huge conglomerate, with diversified product lines that give them much of the same leeway. They just refuse to use it. And in particular refuse to use it to help authors.

I think claiming that the DOJ is in Amazon’s pocket is part of the hyperbole that’s not helping. And the monopoly argument completely overlooks a fact that Keith brought up: Nothing is stopping the Big Five publishers from starting their own online buying service. Except their incompetence and reluctance to innovate.

My guess is that Amazon will not become some evil behemoth, but rather, from the ashes of the Big 5’s demise — and given what I heard after my former agent returned from a recent trip to the Big Apple, all that remains is the curtain-closer — a leaner, smarter, more agile publishing environment will emerge. It already is with small publishers who haven’t gotten into bed with the Big 5, and many indie bookstores — Book Passage, City Lights, Elliott Bay, Tattered Cover, Powell’s — are finding a way to survive by doing what they do best: aggressively and intelligently assert their unique identity and serve their customer base.

I get where you’re coming from, and I appreciate the reasonableness with which you make your point. But I think chicken little (the Big 5) should take a long hard look in the mirror.

Both of you are making a similar point, I think: The publishing industry should stop complaining and get more agile, innovate, joint the 21st Century…just get WITH IT. Amazon did and look.

Hey, no one dislikes the inefficiencies of old models more than me. No one dislikes 25% e-book royalties more than me, though I’m hardly unique among agents in that. It’s tempting to make the Big Five old, crotchety and protective whereas Amazon seems modern, internet speedy and free-market fair.

In one sense I agree: Get with it, guys.

It’s nice to see it that simply but simplicity makes me suspicious. If I want stereotypes, black-and-white debate and righteous purity I have politics and TV for that. (Oh wait, I don’t own a TV.)

Folks on the author side of the fence, I feel, sometimes lump publishers and retailers into “the publishing industry”, as if they act (or fail to innovate) together and “traditional” or “print” publishing–or sometimes just “New York”–and brick-and-mortar booksellers are all one thing.

They’re not. Publishers and retailers do two different things. Both do their jobs well or not. Bookselling independents like Powells are holding their own pretty well, as you note, David. Publishers large and small are largely doing fine, too. The “industry” is far from dying. (Sorry, David, no ashes now, soon or likely ever and you wouldn’t want that anyway, trust me.)

However, note that profit margins are not lavish for publishers or retailers. Authors are a third part of the partnership and the whole “industry” works when all the partners respect each other and allow each other a reasonable share of the pie. That way we all get to have pie.

Start hogging the pie and things don’t go so well. The others at the table will sooner or later start to feel hungry and become less convivial. The process of harvesting, cooking, setting the table and serving the family gets distorted. After a while we’re not sharing a meal anymore but starving each other to save ourselves.

(Self-pub authors may be thinking, “Yeah, exactly. Take THAT high and mighty New York. 25%? Feh.” Don’t blame them. I feel that way too on that topic.)

Amazon has innovated in pricing and customer service. No question. They have. That’s not wrong and they deserve their market share. Let others learn a trick or two, eh?

But again, let’s not be simplistic.

As others have noted here, Amazon has also used loss leader strategy on a scale never before seen. Until recently they escaped sales taxes. They also have so far escaped the imperative of profitability. As Brendan Halpin notes above, that cannot last.

Barnes & Noble grew with discounts…but discounts only lasted until mom-and-pop competition was all but wiped out. What do you think will happen when Amazon must finally face the music on Wall Street?

Amazon may be thinking like a business, simply and without qualms. But this “industry” isn’t just them. It’s all of us. And we’re in it together.

I’m not ready to cheer Amazon and let Hachette squirm. I am ready for fair distribution terms that let everyone share, learn, grow and keep delivering to the world what we all love: good books, in abundance.Donald Maass´s last blog post ..Koko Takes a Holiday by Kieran Shea

I think the ashes are in the box of chocolates I was gonna give Keith. (Yes, I too can be guilty of a wee tad of hyperbole. Ahem. I blush. Actually, what my agent said is she’s never seen the mood so dour, because trade paperback sales were in pretty bad shape.)

As much as I want to believe in a marketplace where everybody agrees to play nice and negotiate in the best interests of all, I also know that to be largely a fantasy. That happens when everybody at the table has reasonably equal power — and authors seldom if ever have that power. We’re therefore beholden to the powerful to protect our interests — a devil’s bargain if there ever was one, but okay.

Also, as one commenter above noted, I don’t see Amazon authors demonizing the Big 5 in the same way many indie bookstore supporters and Big 5 camp followers lustily condemn Amazon. I may be skeptical about the rhetoric or the motives of Hachette and others, but I don’t think they’re evil and I don’t want them to fail. So if everyone should play nice, let’s see that all around the table.

Following your argument, you’re saying I should worry that Hachette and other big publishers are losing power before Amazon, because if Amazon gains its hegemony they’ll start doing bad things … like lowering ebook royalties to NY pub levels?

Granted, Amazon is trending more toward the old model, which isn’t the direction I’d like them to go. But that argument also blurs their publishing function with their retailing function.

And yes, pretty soon the other shoe is going to drop on profitability and sales taxes, etc.

But I really do think the ball is in the Big 5’s court, and they have to learn to compete more successfully in a new environment. And yeah, Amazon’s going to have its own problems. Perhaps that’s somewhat simple. But it’s not simplistic, because that involves a thousand decisions.

In truth, I’m weirdly optimistic about all of this. I don’t think it’s going to be fun or easy, but I think this shake-out will produce something good for readers.

As competition makes outside services more necessary and the true cost of “self” pub becomes evident, self-pub and e-pub will become more like traditional pub. Higher royalty shares may exist but author profitability will be lower. Having print sales (in bookstores!) will look more attractive, as will deals with trad pubs.

Meanwhile, competition will gradually force trad pubs to push out books, flex price and market more like e-pubs. They will also be forced into escalation of e-book royalties. (That’s already starting to happen, but shhh, don’t tell.)

The golden goose called Amazon will eventually be revealed as just a bird who must catch fish and survive the hunters like any other. Its evolutionary advantage will diminish–or be taken away.

(Do you recall the late Eighties Northern California Booksellers association suit against publishers, who gave better discounts to B&N? Playing fields tend to get leveled.)

It will all come out okay. Authors aren’t going to stop writing and readers aren’t going to stop reading. Of that I’m pretty sure.Donald Maass´s last blog post ..Koko Takes a Holiday by Kieran Shea

Don,
I’ve supported publishers for many years with my dollars and I understand the role of the publishing industry in ensuring quality in literature. All I was suggesting was Amazon has leveled the playing field for many talented writers who cannot break into publishing. I don’t like heavy handed business tactics, either, but the technology exists for publishers to create what Amazon has built. That said, I do share your worry over the commoditization of fiction writing. When the pricing floor becomes too low, it is impossible for writers to make a living. But that has as much to do with technological advances and supply and demand (too many good writers willing to put their work out there at bargain prices) as it does with Amazon’s tactics. It is an important discussion and I thank you for sharing your informed opinion with the WU community.CG Blake´s last blog post ..Book Review: The Cuckoo’s Calling, by Robert Galbraith (JK Rowling)

Great article, Keith. I love that you gave us this nugget – “no store sells everything.” That’s just business. As an avid reader, and soon to be published author, I’ve been so impressed with Amazon’s model. If there is a problem with service, it is quickly and courteously resolved. At the moment, I am working with CreateSpace (an arm of Amazon) and stunned by how easy it is to self-publish. I’ve also received my proof, and the quality of my paperback (paper, print, binding) rivals any traditionally published book out there. Amazon has done it’s homework.Diana Stevan´s last blog post ..Cover Reveal for A CRY FROM THE DEEP

You touched on the main point that’s running though my mind in the Amazon vs. Hatchette pissing contest…REGARDLESS of whose side you’re on, it’s the authors and their books who are paying the ultimate price.Marcy McKay´s last blog post ..How to De-funk Yourself As A Writer – Part II

“Yes, Amazon is flexing its considerable muscle. But keep in mind that for now, Hachette has decided to allow their authors’ books to become the casualties of this tug-of-war. And – this is key – the authors have absolutely no say in that decision.”

Thanks for a great piece. Nice to hear a voice of reason amongst the hysteria and hissy fits.

The Guardian piece you cited is by Barry Eisler, a personal friend and a fellow Thomas & Mercer author — an Amazon imprint). He, like me, is also published by “legacy publishers” (one of the five main NY houses still standing, in conglomerate form — I’m also published by Penguin/Random House). I posted his editorial yesterday on FB and I was a bit shocked at the knee-jerk Amazon bashing and the fear that Amazon is seeking to monopolize publishing with some dark purpose in mind (or some dark consequence waiting in the wings). Somehow Bezos and Amazon have become the Emmanuel Goldstein and The Brotherhood in this particular 1984, with the Big Five and Stephen Colbert being The Party and Big Brother — with everyone “in love” with Big Brother for reasons that trouble me.

In the Colbert clip, I was particularly saddened by Sherman Alexie’s shilling for Hachette by holding up the book of a first-time author whose pre-pub sales were languishing because of this struggle between Hachette and Amazon. I wanted to scream at the screen something you point out in the quote I cited above: “Hachette can do any number of things to help those authors — why aren’t they doing it?”

And I thought of medieval lords who put boy soldiers in the front rank so, when they were slaughtered, the lords could protest at the inhumanity of the enemy.

The other truly sad part of this is bookstores refusing to sell books published by Amazon (something no one seems to consider evil). I’ve worked my tail off promoting and teaching at my favorite local indie, but they won’t stock my upcoming book. And that is their right. I can live with it. I just hope our relationship on everything else doesn’t suffer — and I’m going to do my best to make sure it doesn’t.

No tongue?! Okay, but that means I’m gonna keep the box of chocolates I bought you.

I was struck by the contrast between what RJ Crayton said above: “The real problem is Hachette wants authors on their side but won’t tell what they’re fighting for because negotiations are private.”

And what Stella, a Hachette author, said: “Our CEO has written to us many times. And each time I reply with: “Fight the good fight. I’m behind you all the way.””

I wonder if Hachette is truly being candid with its authors, or whether it’s in fact fighting “the good fight.” Could be. I don’t know.

Here’s what I do know: I saw two big publishing houses kick to the curb older women editors of mine — brilliant women, who’d made a real mark in publishing — to make room for younger, less expensive replacements. And that, as they say, is business.

I’ve also seen Big 5 publishing houses do everything they could think of to help an author, but it just didn’t work out. (Maybe they weren’t thinking of the right or most effective things, but they truly, energetically tried.)

Somehow I always come away from this debate feeling like authors, especially beginning and mid-list authors, are being used as hostages — or human shields — in these negotiations. But the collateral damage extends far beyond that.

I saw the Colbert bit shortly after I read David Gaughran’s (enlightening) post about Hatchette and the conflict with Amazon. I found the true size of Hatchette and the corporation from which Hatchette comes from (I can not remember the word) shocking. They aren’t a little company. The whole power struggle is big corporations fighting it out. As you note in your post, business does business.

There’s no doubt that Amazon’s power affects many, all the way from the big publishing houses to the self-publisher. I totally see how that power is concerning to the entire continuum. We all like it when we receive the benefits of that power, but when we start having boundaries imposed on us by that power, or the power doesn’t do what we want, then we get mad. If Amazon is doing something illegal, then they should be sanctioned, but that doesn’t seem to be the case. So far, it appears only that they are wielding their power in a way that people don’t like.Lara Schiffbauer´s last blog post ..Funny Friday Photos and a Very Charismatic Puppy

One thing that’s not being said about the whole affair: Amazon, while it has considerable power, opens opportunities for the “little guy”. Self-publishing authors, support services, independent artists and editors all benefit from the publishing model Amazon has put forth. On the other hand, the publishing cartel does quite the opposite, creating an environment hostile to those who don’t or won’t meet it strict criteria.

There is plenty about Amazon to be wary of; in the publishing world, however, they are almost certainly the good guys.

Where were the critics when publishing agglomerated from five hundred or so individual imprints into five U.S.-wide and five transnationally representing thousands globally? Right out front, grieving the old ways that were mere decades old.

Back a few more decades to the dawn of mass produced books, when, beforehand, any print shop with bookbinding equipment handmade books. Critics decried the harm to culture then, and the loss of–what? Costly books, limited distribution, writers’ limited outlets, a hidebound literary monoculture sensibility? Loss of the way the status quo had “always been,” though only for a few generations really.

Beforehand, no copyright law with teeth: any writer’s intellectual property free for pirating–so-called, at the time, “literary agents” first in line at book releases so they could post copies to nearby and far away competing bookmakers for unlicensed reproduction.

Protecting mass production startup investments and profits required copyright laws with bite. The debate was heated, led by legal beagles, opposed by all and sundry, and settled out into an uneasy balance that a century of squabble at last arrived at an uneasy compromise truce.

How far back need publishing history venture to find a settled culture? No when, always a clash of creator, benefactor, sponsor, intervening beginning, middle, end profiteers, cost-conscious consumers at the apex of literature culture’s feedback location, wherever it lays along the circle of literature culture flow.

A writer is a miner extracting raw ore from an elusive motherlode vein, perhaps partially refining the ore, though not an end product purifier: nor a supplier nor producer. Editors are ore purifiers. Publishers are producers. Distributors are suppliers. Booksellers are retailers. Readers are consumers. Consumers speak with pocketbook and voice to all the above.

This current Amazon-contemporary technology publisher crisis is a lot of hot air passing over a counsel conference table, making lawyers richer, challenging and questioning presupposed notions of propriety set for once and all only for an instant moment in time that was passed and gone before anyone noticed the instant, let alone its passing.

This too shall pass. At the least, change is inevitable; forces opposing change are inevitable too: checks and balances to each other. That for me is the glorious outcome of this, the last, and any future publishing culture crises: The culture adapts, adopts, evolves as technology and overall culture allow and desire and needs–and some many ones pay attention and speak up for their self-interests or grab someone’s place in the culture. Say dog eat dog, maybe; survival of the fittest, maybe; or water finds its level, for sure, eventually if not sooner.

As concerns writers’ revenues, a writer creator’s due share will always be foremost in writers’ minds. What it is now and has always been and likely always will be equates to a Biblical tithe: ten percent, a share of gross revenue reported paid to a publisher for a writer’s creation. Notably, what each passthrough station asks for: ten percent gross profit.

The golden keystone business model tithe of ten percent gross profit on top of thirty percent labor cost, thirty percent materials cost, and thirty percent operations costs. Mindful capital costs come out of profit share. Writers prospect like raw ore miners for their ten percent gross profit; the prospects rarely as lucrative as gluttony may demand, though not unheard of.

Writer revenue pressures notwithstanding, the “tug of war” target moving across the middle, here and there, no winner overall, no loser overall, a heavyweight tipping the balance, here and there, a featherweight tipping the balance the other direction, here and there, the contest keeping the culture vital and vigorous, never stagnant.

Very much enjoying and learning so much through this thread today! Thank you to Keith and to the powers that be at WU for being willing to share it. And thanks to all the other people who’ve shared their thoughts and stories and everyone has been so respectful!

I would be interested to know where Patterson, and like-minded authors and publishers who want government intervention to enforce what they feel are ethical business practices in the interest of selling their books, stand on government intervention to raise the minimum wage for workers in places like Walmart, that have been well-documented to pay such sub-standard wages that their workers must rely on taxpayer dollar driven subsidy programs to make ends meet, while the companies they work for reap in massive profits.

Or… is this just another case of some animals being more equal than others?

As one who endeavours to learn as much as possible, to avoid making the common mistakes of those who wander idly into publication, I find your article very informative. Thank you, Keith! Many of the detail mentioned, by you and other knowledgeable folks in the comments, are well over my head, but nonetheless, you’ve inspired me to do a bit of research.

I’m of a mind, though, that my number one task needs to be making my book as good as it can be. A good book will sell because people talk about it, and hopefully it will be available to them – regardless of where that is. Obsessing over how you will sell, and where, is time you could have spent obsessing instead in on plot holes or weak scenes that keep you up at night. When (if) I get a publishing advance, or suitable profit from my (eventual) debut novel, I will invest in a very good marketing guru to decrease my Advil consumption, since I’ll want to stay on top of book promotion, but will also want to spend all possible hours making book two twice as good as book one. I won’t cut corners: I’ll pay this person well. Heck, I’ll even make them pancakes.John Robin´s last blog post ..Words with John

In my first year as a family medicine resident, I learned never to judge a marriage by the words of one partner, even if confronted with persuasive physical evidence that they’d been victimized. (After all, maybe the other partner looks worse.) So far all we have is a lot of spin and speculation, not to mention the inconsistencies you’ve pointed out. I could get upset or I could write; think I’ll focus on the latter.

OK to some degree it’s true that bookstores and publishers alike got themselves in trouble by performing “business as usual” while amazon was a bit more forward-thinking. To this day I wish B&N had developed a self-pub option I’d be happy to go through for my literary journal, Conclave.

However…did you know Lexus started out as a super-cheap car? They wanted to undercut all other motor vehicles, but the American government forcibly stopped them from killing the market like that. They revised their image, and voila, luxury vehicles. Maybe it’s because Lexus isn’t American-made and American-run, and Amazon is, that we just allow them to undercut and destroy all the competition? Vitamins, televisions, electronics, beauty supplies, and yes…books.

They’re cheap. People use them. They’re a necessary evil. But when people used to say “amazon.com” 20 years ago I thought “cool alternative bookstore!” whereas today I think of the devil. :)

Keith–
Thank you for clarifying what is for me a confusing dustup. Most interesting–for me–is to learn how small a percentage of Amazon’s overall business relates to books.
But I can’t let chest-thumping champions of so-called free-market capitalism go un-corrected: there is no such thing as free-market capitalism. The day actual, literal, unregulated, un-government supported capitalism came about is the day all its champions would start howling at the moon.
In wholly personal terms, I have this to say about Amazon: Long ago, I was commercially published. In the following thirty years, the various gatekeepers and taste-makers have shut me out. Is this simple bitterness on the part of someone who played and lost? I don’t think so. And now I find myself on the receiving end of the latest mockery in trad publishing: an agenting system that now requires e-mail queries. In the next breath, it announces that it won’t even condescend to hit the “reply” key for those queries that don’t generate interest. Having gone through this empty drill for weeks, I am now convinced that most if not all agencies are simply indulging in some kind of nudge-and-wink fraud, claiming to take queries seriously, but not bothering with any that aren’t direct referrals from a crony, current client, old school buddy, etc.
This means that without Amazon’s various products–Kindle books and CreateSpace publishing–my solid, worthy work would have no chance of finding an audience. Guess which side of this clash-of-titans I’m on.

I agree with the post, Keith. Thank you. I see an innovative retailer outcompeting a bloated and inefficient adversary who’s worried about self-preservation, but unwilling to innovate. Thus, they’re circling the wagons. They may want to rethink their strategy before someone else comes along who’s willing to compete with Amazon via innovation, be it Apple or another competitor waiting in the wings. The Big 5 need to look beyond their wagons and accept that this is 2014.Christina Hawthorne´s last blog post ..Last Word Before Dying (Chapter 17, Part 3)

I demand that the Department of Justice force the Kroger corporation to bring back the chocolate lactose-free Breyers ice cream at my local grocery store. Now they only offer vanilla, which is clear and damning evidence of institutionalized discrimination against lactose intolerant chocolate lovers. By making it so difficult for me to expand my waistline, Kroger is certainly violating some kind of monopoly laws. Or at least moral codes. Or something.

And you know what the salesperson said when I sank to my knees in the freezer aisle and cried, “Nooo! Where’s the chocolate lactose-free Breyers ice cream!”? She said, “We have some dairy-free chocolate ice creams in the Organics section. You could try those.” You know what I think? I think So Delicious as Kroger wrapped around their evil tree-hugging little finger. There’s no other explanation.

This is nothing short of an outrage. The Kroger corporation has an ethical obligation to sell me my favorite sugary treats. The feds need to get off their fat behinds and order them to immediately, if not sooner, cease and desist in freezing out Breyers.

Did someone say James Patterson doesn’t like Amazons, because they don’t use Hatchets anymore?

Keith, I thought I was the bad speller. Umm, you misspelled hatchet. You spelled it like this “Hachette”. Other than that, it was a good posting. *smile* Look, I think Amazons are hot whether they use hatchets or not. Oh yeah!Brian B. King´s last blog post ..Don’t give me that “I’m a parent, not a friend” SHIT!

As a former Hachette author, a self-pub, a hybrid author, and the co-owner of a small press, with thirty years of combined experience in publishing, including twenty writing for Hachette and other big houses, I could waste a lot of space explaining why your argument is a side issue of no real importance. But it’s worthless having that conversation, because people who don’t work in publishing (the actual business of publishing books, which is unlike any other business) don’t want to know how the business works, and they make absurd assumptions, utter bizarre rationalizations, and get most of their information from half-baked pundits who don’t have a clue, either.

I can tell you this much: publishers have benefited from Amazon and Amazon has benefited from publishers. But now the equation has grown into an unbalanced system in which Amazon’s dominance makes it difficult for booksellers and publishers (those of us who only sell books, unlike Amazon, who uses books as loss leaders to sell bigger merchandise) to compete, to find other sales channels, and to mentor the many, many fine authors (you can call them “traditional” even though most are aspiring authors who haven’t published yet) who do not want to self-publish.

As I watch a large faction of self-pubs rant against big corporate publishers while embracing a much much bigger corporation (Amazon) as their bestest friend who’d never, ever abuse their faith, I see a bleak future for most.

Deborah–
Although you offer only opinions without specifics, no one is going to challenge your credentials to speak on publishing issues. And perhaps your ominous, concluding innuendo will turn out to be prophetic (Amazon is a much bigger corporation who’d never ever abuse indie writers’ faith = a bleak future, etc). If so, all I have to say is this: a bleak future that I have some modest control over is better than one at the mercy of complacent, inaccessible strangers–which is no future at all.

Long-time Amazon apologist Barry Eisler, whose novels are currently published by Amazon’s Thomas & Mercer imprint, makes a number of errors in his Guardian article. Chief among them, beyond understating his very active and ongoing relationship with the company in whose defense he writes so often, is the suggestion that authors have the contractual or even the moral right to insist that their houses pull their books from particular retail outlets that they don’t happen to like. He knows that this can’t be done. He also knows — or he should know, if he’s paying attention to anyone other than himself and Jeff Bezos — that the bestselling author who somehow managed that trick would be hurting his publisher and the people who earn their livings there much more than he’d be hurting himself or punishing Amazon. It’s a shame that this nonsense somehow gains currency.

I’m getting a little late to this debate, fascinating comments! And Keith, you’re NOT at big poopyhead! Your analysis is excellent and you got everyone to chime in and write their best…

I like what everyone has said, especially Donald Maass, David Corbett and Deborah Smith – you get quite a range of opinion – but I wonder whether the accent has been placed on the right aspects.

Like you Keith, I have some business/economics credentials (Columbia U. grad) and I tend to look at things with the lenses of an economist. Here, Amazon basically has little to lose – after all, bookselling is just 7% of their overall business – while bookselling is Hachette’s primary function. But it so happens that because Amazon has been losing money for years – especially in the bookselling area because of their habit to use books as “loss leaders” – , Wall Street investors are beginning to fidget, they want to see results. Something solid, not all that hype about how Amazon is daring and innovative etc.

So, for once, Amazon might be truly interested in making money from the books it sells. And they are in a tight spot. Let’s face it, no Create Space printed book of theirs reaches brick-and-mortar bookstores. They are yet to produce big blockbuster books the way the Big Five can. Sure, no one knows who the Next Big Writer is going to be, but so far, NBWs don’t seem to come out of the Amazon stables. This is not to say it won’t happen – as I write, it may have happened already!

The Big Five play a very complex game of creating buzz around a book that Amazon still can’t match: what Amazon does is use customer reviews and play with best seller lists based on the number of sales on their site. But unfortunately, that is not the same thing as filtering books for quality. The Big Five are still viewed as the gatekeepers of quality, a status Amazon has yet to attain.

So Amazon has some way to go still and needs to show its investors results – no doubt that explains why the negotiations with Hachette have stalled. I have no doubts that they are going through complex and acrimonious debates because Hachette has a big stake too, it’s bottom line is threatened if it is forced to allow Amazon a larger take. But can it really turn off a big book retailer, the biggest in the world?

No doubt it can’t. So Hachette’s take will go down for sure. How much, we can’t tell, but down it will go. And that downward pressure is obviously only the beginning: Amazon will certainly at some point in the near future apply this to everyone, self-published authors included.

Hey, fellow self-pubbed authors, we had a free ride for a long time, it might just become a little less free soon, but still, what a ride! Thanks to Amazon, the playing field has been leveled and the stigma taken off self-publishing…That’s worth something, isn’t it?Claude Nougat´s last blog post ..Can an Artist Have a Second Life after Death?

Terrific article; very well thought out. I have to agree with you. I’m not familiar with Hatchet, but they do sound like a hard nut to deal with. That may be the reason Amazon does not want to deal with them.
I self-published my first novel. It was a learning experience and not one I’m eager to repeat. The biggest issue I had was that they printed my book in a 9 font. When I questioned them on it, they said I sent it in that way. My first argument was that as an RN I knew how to follow orders. I submitted it in 12.
Second point of contention: IF I had sent in 9, why didn’t they say something? They’re supposed to be professional publishers, not just a print shop. We did a lot of emailing and I saved every one. I went through all that mail to see if they bothered to tell me about the problem. Nary a word.
Third issue: Recently I asked about doing a free price for a short while on Amazon to see if that would help. They flat out refused with no discussion.
After reading your article I get the impression Amazon is a bit particular (not necessarily bad). That creates a new worry for me–Will they want to carry my next novel? I like Amazon and think it’s a great source for books as well as a lot of other things. My husband is a huge fan of theirs. Amazon is like part of our family.Connie Terpack´s last blog post ..Early Theme Adopters: Gridiculous Pro

Thanks for a really balanced view of the issue. You made so many good points it’s hard to pick out just one as my favorite. However, I laughed when you mentioned that none of the authors who are chest-thumping about the issue have pulled their books from Amazon. Publicity is publicity, right?Maryann Miller´s last blog post ..Friday’s Odds and Ends

As someone who is just getting into this game this article provides a good oversight into the book publishing situation. So thanks!

I frequently buy from Amazon and when my e-book is ready I plan to sell it on Amazon. I have no objection with Amazon’s business model. It is unrealistic to expect them to refrain from what is normal practice in most businesses.
ML

I enjoyed reading this article. It’s provided a nice counterbalance to most of the others out there I’ve read, many of which were making me feel guilty as a writer for not supporting Hachette in this struggle. And I’m so glad that you pointed out this:

“Amazon’s US book sales make up only 7% of the company’s $75 billion in total yearly revenue”

and I want to add some additional information to put this even further into perspective. A significant percentage of their yearly revenue doesn’t even come from their retail business at all. In fact, about 20% (and expected to continue growing) of their revenue comes from Amazon Web Services, which provides database and cloud storage and computing management to other business like Netflix, Dropbox (the last I heard), and now even the U.S. government. Amazon may have started as a bookstore, but they are much more than an online retailer at this point.